Lok'nStore reports record full-year revenue and profits

31st Oct 2022 12:00

(Sharecast News) - Self-storage operator Lok'nStore reported record revenue and profits in its preliminary results on Monday, as it hiked its dividend by 15%.

The AIM-traded firm said group revenue in the 12 months ended 31 July was up 22.9% year-on-year at £26.9m, while group adjusted EBITDA was 37.5% higher at £16.4m.

Its operating profit before non-underlying items was ahead 49.8% at £11.4m, and its operating profit after non-underlying items rocketed 130% to £17.2m.

The board said that growth was driven by a 13% increase in its achieved rate on occupied space to £25.6 per square foot.

Managed store revenue grew 107% to £2.8m, while its cost ratio reduced to 38.5% from 44.9% year-on-year.

Lok'nStore said its cash flow growth drove its 11th consecutive year of a dividend increase, with cash available for distribution per share up 36.6% to 38.7p.

As a result, its annual dividend was up 2.25p to 17.25p per share - a 15% improvement over 2021's distribution, and covered 2.24x by cash available for distribution.

The company's adjusted net asset value per share was up 33% to 972p per share.

It reported £46.5m of cash at year-end, up from £9.1m, while net debt excluding lease liabilities and deferred finance costs narrowed to £20.3m from £56.3m.

The loan-to-value ratio fell to 6.6% from 21.0%, while the firm executed its £25m accordion to increase its bank facility to £100m, and extended its bank facility by one year to April 2026.

Looking ahead, Lok'nStore said new store openings and rate increases would lead to further revenue and profit growth.

It said its trading momentum continued post the year-end, with same-store revenue up 13.6% for August and September compared to the same period last year.

The board left its strategy unchanged, as it aimed to increase revenue from existing stores and open more new 'landmark' stores, while maintaining the flexibility to respond to market circumstances.

"We are on site at four new landmark stores which will open within the next 12 months and can be completed using cash-on-hand," said executive chairman Andrew Jacobs.

"At 31 July, our secured pipeline of 10 new sites increases owned space by 44.1% - this pipeline of new stores will add further momentum to sales and earnings growth.

"We have reduced our net debt to £20.3m, and our business model enables us to build out the pipeline as market circumstances dictate."

Jacobs said the company aimed to build more landmark stores in the under-supplied UK market.

"We are growing the business from a strong financial platform that gives us great flexibility to respond to market circumstances.

"We have multiple levers to allocate our capital in ways which are most accretive to our shareholders through the economic cycle, and we are confident that we will continue to increase net assets, cash flows and dividends."

At 1137 GMT, shares in Lok'nStore Group were up 9.81% at 916.9p.

Reporting by Josh White for Sharecast.com.